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Waiver Update from the State of CA

Yesterday, the state convened the fifth in a series of §1115 Hospital Waiver Stakeholder Adviser Committee Meetings, conducted in accordance with the Bagley-Keene Open Meeting Act.

The meeting included updates on:
(1) negotiations with CMS;
(2) state legislation;
(3) budget neutrality;
(4) federal financing; and
(5) early implementation activities.

Speakers included:
David Maxwell-Jolly, DHCS Director
• David Panush, Senate President Pro-Tempore’s Office
• Sumi Sousa, Assembly Speaker’s Office
• Toby Douglas, DHCS Chief Deputy Director, Health Care Programs
• Gregory Franklin, DHCS Deputy Director, Health Care Operations

I. Update on Discussions with CMS (David Maxwell-Jolly)
• In June, the state sent a 70 page concrete waiver proposal to CMS
• Since then, there has been a very intensive and steady back-and-forth
• CA has been extremely well received by CMS, with “attention and vigor”
• CMS very much in a problem solving mode, looking for solutions
• CMS likes CA’s approaches to better care coordination, medical home, ACOs.
• CMS especially interested in effective investments in our safety net systems and global budgeting proposals
• CMS wants to ensure mandatory enrollment of the SPD population happens as a graceful transition. CA must identify folks with high healthcare needs and be sure the state is doing everything to ensure plan readiness.
• Lots of interest from CMS re: coordinating behavioral and physical health.

II. Legislation / Trailer Bill Language Update
David Maxwell-Jolly
o Lots of talk in Sacramento since language went live last month, lots of dialog around the issues being raised, solutions emerging. There are continuing and frank discussions with health plans, advocates and other stakeholders.
o Common concern: implementing the waiver provisions effectively and meeting the needs of the beneficiaries
o Moving toward more specifics on care coordination and medical homes.
o Will be one, if not more, rounds of additional amendments.
o Trying to strike a balance between what is practical and reasonable ways to meet critical needs so that the systems do work

Sumi Sousa
o Lots of attention/conversation on the SPD, CCS, and duals. Refinement will happen, but the attention will shift a little now.
o Time to start focusing on important hospital financing provision – nothing else will matter without a $ figure at the end

David Panush
o Amendments to the Waiver bills are being done through an iterative process.
o New amendments probably out in the middle of next week.
o These won’t be the final set of amendments. We are still waiting on CMS for financing piece (more below). Once we know the total federal financing piece, the discussion will turn to “how the pie gets sliced up.”
o “The next 5 weeks will be the most strenuous and there is no inevitably.” We’re pushing the agenda, but it’s a huge ask. The only way this is going happen is by achieving consensus (state, CMS, plans, stakeholders). Must be some unification. If not, we can just stall and try again next year.

III. Budget Neutrality (Toby Douglas)
– Goal: construct budget neutrality (BN) that brings in most federal funds
– BN based on a few components:
1. Coverage Expansion: with health reform, states can begin on coverage of childless adults through a state plan amendment (SPA). Instead, CA is requesting to do so under the waiver. If we’re permitted to do so, we want to count this expansion outside of BN requirements.
2. Public Hospital Spending: making the assumption/assertion that had CA not entered the last Public Hospital waiver, we would have seen massive growth in cost (8.5%) for Public Hospital expenditures through 2015. Therefore, with a large trend line absent a waiver, there’s a lot of room for BN.
3. Implementation of Organized Delivery Systems of Care for Special needs Populations: absent this waiver, expenditures for this program will grow much faster. With better coordination, we will reduce the trend rate
4. Longstanding recipient of funding under the LA County waiver. Continuing to carry that forward should be counted with a BM gain.
5. Also $360m per year we just received, added in 5th yr of waiver; we should continue to receive that in the new waiver.
– If all 5 pieces receive CMS approval, CA will be able to draw down $10 billion over 5 years.

IV. Waiver Financing (Toby Douglas)
– Overall Point: no state general funds. Plus, MOE under ARRA and PPACA. So, need to look for other opportunities:
o Expanding state-only programs being claimed under waiver (currently 6 programs) to more programs: workforce money, MRMIP high risk pool (prop 99 funds should be claimed under waiver), parolees assistance, IMDs, and over-night hospital stays in corrections.
o Global Payment Process for Public Hospitals – set limit of funding that they have to live within, then they have to try to allocate care and promote prevention. Payments would be above cost.
o Improvement pool – through IGTs, allow public Hospitals to invest in deliver systems through improved flow of patients through out patient system.
o IGTs for non-contract Hospitals – allowing for IGT above cost, supplemental payments for that group, to help private safety net systems.

V. Preparing for Implementation (Greg Franklin)
– Some preparation for the waiver being done now, especially with the SPD Transition.
o Provider cross-walk takes Fee-For-Service (FFS) providers and cross walked it with plan providers, continued to build providers for SPD populations.
o Aggregate data: number of Medi-Cal only population by aid code provided to plans in June. Will be posted to website by Aug/Sep.
o 2009 Paid Claims Raw Data for FFS service, county specific – this has been shared with plans.
o County Alternative Model – those Counties that are interested due back Aug 15.
o Outreach and Education Work
• SPD sensitivity training.
• Western University of Health Sciences developing it, will be developed with stakeholder input, conducted in Jan 2011 for everyone (one in Nor Cal, one in So Cal)… trainers for plans, train-the-trainers, DHS managed are staff, community organizations, etc.
• Informing Materials and Presentations
• UC Berkeley will be developing pre-enrollment notifications and other materials, in all threshold languages and alternative formats
• Starts no later than Nov. 1,
• Revising facility site review tool.